A couple of interesting YouGov findings in yesterday’s Sun and this morning’s Times. Both had questions about perceptions of the state of the economy, and both showed a stark decline since earlier in the year. Regular readers will remember that there had been a pattern of the public still being pessimistic about their personal finances, but becoming more optimistic about the state of the economy as a whole. That appears to have changed.

In the YouGov Sun poll poll yesterday 25% of people expected the economy to get better in the year ahead, down from 39% in March. 32% expected it to get worse, up from 23% (tabs here.)

A similar poll for the Times RedBox done a day later found the proportion of people thinking the economy was either on the way to recovery or showing signs of recovery was down to 40% from 50% in August, and the percentage of people thinking the economy was getting worse was up from 13% to 22% (tabs here.)

Both questions were run prior to the government’s Autumn Statement, and while I doubt many people actually watch it the media coverage of the economy over the last few days may yet make a difference – either positive or negative. Beyond that, as with most political events, I wouldn’t expect the Autumn Statement to make much difference.


432 Responses to “Falling economic optimism”

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  1. @Catmanujeff

    I totally agree with your post at at 8:08 pm especially this part

    “Perhaps the suggest re-alignment of UK political parties may come sooner than planned. Those who fundamentally believe in shrinking the state (supposedly to 1930s levels) now have a model and blue-print, and whoever wins the GE has some serious decisions to make.

    Alternatively, if the GE winner doesn’t fancy that option and wants to hold line they will need to be more open about what this means for taxation in the UK.”

    Nicely put

  2. “The SDP hindered the Labour Party for an election then disappeared.
    There is currently no evidence that ukip will be different.”

    Just disappeared by magic then – nothing to do with the Labour party changing its 1983 position?

    And the Cameroon’s problem is nothing to do with the issue that been #1 for years and isn’t going away?

  3. Whoever gets in next time needs to forget the cuts and increase taxes. Surely it is better to keep people in work and keep our services running whilst those people and services contribute to the tax income rather than increase unemployment and reduce services even further whilst also losing tax income from earnings. Tell everybody why you’re doing it and do it hard so that we eliminate this deficit in one parliament.

    Of course that party would lose the next election but so what, they’d be remembered in the history books for all the right reasons and when all said and done isn’t that what these people yearn for?

    Here today, forgotten tomorrow. What’s the point in that?

  4. Marvo
    “….. rather than increase unemployment….”

    Unemployment is going down.

    “Of course that party would lose the next election but so what, they’d be remembered in the history books for all the right reasons and when all said and done isn’t that what these people yearn for? ”

    That might be part of it but immediate power and money are also strong motivators,

  5. Allan, its 50 for SNP! Happy now?

    Looking at the other Yougov crossbreaks we can see UKIP is becoming the protest party for men, the Greens for women, similar to that Ipsos Mori analysis of the Green vote posted earlier. Haven’t really noticed that in the crossbreaks before, but it is clear there today.

    I wonder if any of the UKIP protest vote will now swap sides to the Greens now that the Greens look like they are becoming a viable opposition? I get the feeling that at least some of the UKIP vote is just a protest against the main parties – will they feel more at home with the Greens?

    I know their policies are polar opposite. Will be interesting to watch as the Green surge gathers pace.

  6. Pete B

    “Unemployment is going down”

    I know but losing one job in Education and gaining two in McDonalds on zero hours contracts is hardly something to shout from the roof tops AND it isn’t going to increase your tax revenue.

  7. Richard,

    Green messaging has long been that UKIP voters are fascist morons, so I can’t see many of them swapping sides.

  8. @MrNameless

    I’m thinking about those 13% of 2010 Lib Dem supporters now voting UKIP. I can’t really see any policy overlap there, so am assuming that is a protest vote. As the Labour message that Farage is just ultra Tory gets out, will those voters switch to the Greens, the Greens being the anti-austerity party who are not LIbLabCons?

  9. ALEC

    Tax increases are the last thing the economy needs IMO.

  10. Marvo

    See my post to Alec

  11. The economy is not as good as it seems. We have ever increasing numbers in employment but a large number are not paid enough to live on and depend on tax credits. Here in Keighley we are seeing an increase in the numbers of children arriving at school hungry and the Salvation army food bank is finding increasing numbers of people requiring food parcels. I understand there have to be cuts but the way this government is going about is unfair.

  12. Populus:

    Lab 35 (=)
    Con 33 (+1)
    LD 9 (=)
    UKIP 14 (=)
    Oth 9 (-1)

    Of particular interest to me is the true level of LD support. If it’s 9% Clegg wins. 6% and Coppard might make it.

  13. Election Forecast 4th Dec:-
    C 32.8%/Lab 30.2%/LD 13.9%/UKIP 12%/ Others 11.1%

    Fisher 5 Dec:-
    C 33.6% / Lab 31.0%/ LD 10.8% / UKIP / 14.1% / Others 11.5%

    Election Forecast:-
    C. 284 / Lab 276 / LD 28 / Others 62
    Fisher:-
    C 292 / Lab 298 / LD 29 / Others 31

  14. I think the winner from the autumn statement is becoming clear – the Greens…

    ManchesterYoungGreen [email protected]
    Incredibly, 1000 people have joined @TheGreenParty in the last 3 days alone. #GreenSurge

    NumbrCrunchrPolitics [email protected]
    Tonight is the first time EVER with Greens ahead of #LibDems in consecutive YouGov polls. WMA15 v close to crossover. #GreenSurge continues.

  15. Roger Mexico
    Re your 10.18 post.
    I’m not horrified or surprised that people what a Big State. Most people always want what they think is the soft option, they don’t like facing up to reality, t’was ever thus. Nor am I surprised that people want re-nationalisation of energy sources and the railways. They rapidly forget how bad things were, how many strikes there were, I could go on for ages. It’s all part of the same weak way of thinking and it has led to Britain’s steady decline. I think this decline is now irreversible now which is why my advice to my children and grandchildren is leave and make a good life for your selves elsewhere in the World.
    It doesn’t actually matter what people think about the Big State because World economic forces mean that the Big State is no longer viable.
    All this is of course IMO, I know this is a minority view, but, as so often with minority views at a point in time, that does not mean it is wrong. It’s why I do not belong to any of the political parties in this country. That is not to say I won’t vote, of course I will and I will vote for the party which is doing the most to ensure that the rate decline of decline is the slowest.
    Have a good day all, I’m off for a walk in the sunshine, and before the inevitable rain returns.

  16. AW
    Thank you for updating the UKPR polling average. After a brief spell in grey, we are back to red, which will be pleasing to those people who support Labour!

  17. “Tax increases are the last thing the economy needs IMO.”

    ————–

    Especially on storage…

  18. Scotland: SNP on 41% in Populous which is high for that pollster. Still big downweighting 70-46. Labour on 27%,

  19. Yougov Scottish cross break

    SNP…50%

    LABOUR…24%

    TORY…11%

    LIB/DEM…5% (LIB’S in 5th place in Scotland)

    UKIP..8%

    GRN…2%

    STATGEEK……Got there in the end. ;-)

  20. RICHARD
    Allan, its 50 for SNP! Happy now?
    _____

    Dlighted ;-)

    I know it’s just cross breaks but I think that’s now all the pollsters at one time or another showing the SNP at 50% or above.

  21. “Nor am I surprised that people want re-nationalisation of energy sources and the railways. They rapidly forget how bad things were, how many strikes there were, I could go on for ages.”

    ———-

    Yes it was awful. You could actually afford to heat your home, take the train… and actually get a seat.

    As for strikes, the country was not riven by strikes from the fifties through to tne mid sixties. From the late sixties onward, strikes became more frequent, owing to increasing inflation hammering pay packets.

    The reason? Increasing commodities prices, which then really hit home with the oil crisis. The reason we were so affected by commodity prices was that Nixon ended the system of commodities buffers in the late sixties which had been set up to smooth out commodity price fluctuations, and others followed suit.

  22. Whatever options are chosen, there will be a negative effect on the economy, slowing it down and perhaps causing a return to the conditions mid-term this parliament, double dips and all. The situation in Europe will not help that. I think economic confidence is beginning to dip again, despite the mini-boom we have had recently.

    I can’t imagine the next government being that popular, even if by something strange they get a decent majority. There’s going to have to be some token tax cuts to help keep voters on board.

    The overall effect of UKIP on the Conservatives (if elected with an overall majority, unlikely as that is) will stop them being able to act as they did in the 80’s: effectively only governing for the 40% who voted for them and not worrying about the rest while Labour were struggling to get above 32%.

    I really think that deficit will take longer to get under control than we are led to believe.

  23. @ Richard

    Tonight is the first time EVER with Greens ahead of #LibDems in consecutive YouGov polls. WMA15 v close to crossover. #GreenSurge continues.

    Populus: 5 Dec

    Lib Dems 9%
    Greens 4%

    Not much sign of a “surge” there, is there?

  24. SNP look like they will get around 30-35 seats.

    It amuses me that within the bounds of Scotland, the ratio of votes to seats seems rather more proportional at the moment than the UK as a whole. Thus I can’t see the SNP wanting PR as the LD’s will be wishing for. There’s nothing in it for them.

  25. People have very selective memories-
    Carfrew – “You could actually afford to heat your home…”
    – but hardly anyone had central heating, which is now the norm, and is of course more expensive than a single coal fire.

    KeithP – “…(Conservatives) being able to act as they did in the 80’s: effectively only governing for the 40% who voted for them and not worrying about the rest ”

    Reducing the BASIC rate of income tax from 33% to 22% is one example of a measure that benefitted everybody, especially the low paid.

  26. @RC

    That’s because Populus weights according to this question

    Q.4 Regardless of which party, if any, you are likely to end up voting for at the next General Election due in
    May 2015 or are leaning towards at the moment, which political party would you say you have usually most closely
    identified yourself with?

    And the weight attached to the Greens is 2% and the SNP is 2%, which are their historical figures

    So Populus tells you who people used to vote for, not who they will vote for now. (Or it may be argued the small parties get squeezed in a general election, so it is an attempt to forecast who people would vote for if there was a general election, which may very well be accurate as we saw the Greens squeezed in Rochester, with lots of people apparently telling the candidate they wanted to vote for him but they voted for someone else to keep another party out).

    I agree, Greens need to get into double digits and start polling at UKIP levels before they are viable, at current levels their vote will probably disappear at a GE and they will disappear again. But they are headed in the right direction to cause a surprise.

  27. @Allan

    Happy Christmas. :))

  28. @Floater

    Yes, by 2020 55% of household income as unsecured debt and 180% of household income as total debt. Both of these would be completely unprecedented and remember a large driver of the last crash was household debt reaching 170% in 2008.

    It seems pretty remote to me that this is sustainable (never mind desirable) and I’m afraid the unpalatable truth is that we will have as a society to reduce consumption.

    Unless we commence smoking thorium and dramatically increase productivity.

    Nobody is admitting or addressing this issue, except perhaps the Greens.

  29. Just on the Lin/Dems in Scotland. That’s two consecutive cross breaks showing UKIP well ahead of the Lib/Dems.

    However I think the prospect of UKIP winning a seat in Scotland is zilch even if they were to poll 20% because Scotland has 3 established parties plus the Lib/Dems, although IN terminal decline they have a strong incumbency factor and might hold onto a couple of seats on a very small national vote share.

    Point of interest. ..We had a Scottish election in 2011 where the Lib/Dems lost all but 1 of their FPTP seats. Recent polling has them polling well below their vote share in 2011.

    If the Lib/Dems were to lose all of their Scottish seats that would = 20% of total in Westminster seat tally. Now my guess is that they will lose 9 seats in Scotland (still around 18%) of their total but that small VI in Scotland of 4% can translate into the UK Lib/Dems losing 20% of their Westminster seats.

  30. I think there has been an increase in SNP VI in Scotland since the Smith commision and also a further increase in membership.

    It could be that SNP gets a boost when constitutional matters are in the news – which is bad news for Labour as the constitution is likely to figure until May.

    It seems that Gordon Brown did Labour no favours when he went beyond the Vow. The actual Vow published by the Daily Record was ‘apple pie’.

    But GB described what was on offer as ‘near federalism’ and ‘home rule’. GB was speaking on behalf of the WM government and the 3 parties. However, I suspect he was a bit off-script. So now LiS have to deal with heightened expectations and the fall out of not being able to meet them.

    In todays YouGov the combined Plaid/SNP/Green vote is 14%, just 1% behind UKIP. So a progressive alliance at WM is a plan with possibilities. The concentration of votes could lead to a block of over 40 seats. If the block negotiated a C&S deal with Labour then a very progressive WM government could emerge

  31. Populus still sticking with the “35% strategy”, I see and the Tories receiving their predicted Autumn Statement bounce. Up by 1%.

    :-)

  32. @ Carfrew and ToH

    I think you are both betraying your prejudices!

    Many strikes, especially in the 70’s, had an overt ‘class war’ back-drop; there was a clear aim to bring Trade Unions in to the political arena as an equal third force alongside ‘Business’ and Politicians’, and it was a pretty unhappy time for the effectiveness of British industry as a result. Some of us remember ‘beer and sandwiches’…

    However to blame the appalling state of the railways in the early 90’s on strikes is totally dishonest; the railways (along with a variety of nationalised industries that the Tories wanted to privatise) were systematically starved of investment funds to ensure a deteriorating performance that would soften the public up for privatization. It was a quite deliberate ploy (as it happens, back in the day my mother typed up one of the internal reports on this.)

    It’s not like the public purse saved money, because the delayed investment was then made through government subsidies to the train operators. It was pure politics.

    The political forces on the right and left were both destructive in the interest of their respective agendas in the 70’s and 80’s…it’s entertaining that you each recognise the failings of the other side but excuse your own side’s reprehensible behaviour!

  33. @ Richard

    And how do you explain away the fact that Ashcroft had the Greens at 8% in October and 6% now?

  34. KEITH P

    @”I really think that deficit will take longer to get under control than we are led to believe.”

    I fear you are correct.

    At least Cons have had to spell out how they will do it & by when -promptly followed by Labour’s ( not unreasonable some might conclude ) charge that their prescription will be politically impossible.

    So we wait for EB to tell us what reducing the “Current Budget” deficit as soon as possible” actually means-and how much additional borrowing he will generate to fund the “Capital Budget” which he has excluded from his deficit reduction commitment.

    I’m not holding my breath.

    Looking through the IFS analysis of the AS , there is one truly frightening feature which has hardly raised a comment.

    Gemma Tatlow analyses the changes from Budget 2014-only six months ago mark you.

    By 2018/19 Revenues are £25 bn pa less than expected only six months ago. Offset by £24 bn reduction in spending in that year alone.
    Of this latter sum £5bn is from lower inflation & £13 bn ( !) from lower interest rates .

    This looks very much like a wing & a prayer to me.

    OBR have an interest rate Ready Reckoner which gives the effect of 1% pt of Gilt Rate change = £10bn pa to the Treasury.

    Given the eye watering Debt level later in the next Parliament -£1.6 bn-the risk to Public Finances of relatively minor changes in interest rates becomes truly frightening.

  35. STATGEEK

    Thanks and the same to you. :-)

  36. COUPER

    I agree on all your points with regards to the Smith report.
    ….
    “In todays YouGov the combined Plaid/SNP/Green vote is 14%, just 1% behind UKIP. So a progressive alliance at WM is a plan with possibilities. The concentration of votes could lead to a block of over 40 seats. If the block negotiated a C&S deal with Labour then a very progressive WM government could emerge”
    …..

    For the SNP I think a C&S deal would be the best option because as i have said before, any formal coalition usually spells disaster for the junior partner as seen in Wales, Scotland and now Westminster.

    However I still hold the view that in the event of a hung parliament then the largest party should be the one other smaller parties negotiate with first.

  37. The spread of LD’s lost 2010 VI is beginning to be matched by that of Labour.

    Both Con & Lab have lost 32%ish of their 2010 VI. ( incl. WNV/DK)
    Whereas Cons’ has gone 10% WNV DK,/ 18% UKIP, /4% others;
    Labour’s has gone 11% WNV/DK / 7% UKIP / 6% SNP / 4% Green / 4% others.

    So the “core” of 2010 VI for Lab & Con now stands at :-

    Con-68% X 36% = 24%
    Lab-67% X 29% =20%

    Labour’s 5% pts of VI from 2010 LDs is absolutely key for them-even more so as they start leaking to Greens & SNP.

  38. Here’s a bit of political intrigue – http://www.bbc.co.uk/news/entertainment-arts-30340704

    So Russia is pissed off with the EU, and probably the G7, and wishes to call the shots on oil and gas costs and supply. With Putin opting for Turkey over Ukraine / Belarus to invest pipelines and so on, it makes sense that supply to Central or Western Europe via Turkey will pass through Greece.

    So…what’s the betting that Russia hands the Elgin Marble over to Greece (who dispute ownership of the marbles) to cement a relationship, and assure a Southern European supply line?

  39. Pete B –

    people do appear to have very selective memories.

    basic rate tax went from 33% in 1979 to 25% in 1988.

    It stayed at 25% until 1996 when it reduced to 24% and then 23% in 1997, being reduced to 22% in 2000.

    Further reduction to 20% came in 2008.

    From 1992 a lower rate tax of 20% was introduced on the first £2000.00 of taxable income, which rose over time to encompass the first £4,300 of taxable income by 1998.

    In 1999 this was replaced with the lower rate of 10% on the first £1,500 of taxable income, which again rose over time to £2,230 by 2007.

    The lower rate was abolished in 2008 when basic rate tax fell to 20%.

    In order to finance the reduction in basic rate tax in 1979 the standard rate of VAT of 8% and higher rate VAT of 12.5% were combined and increased to 15%.

    VAT was increased in 1991 to 17.5% to finance the shortfall from the change from Community Charge (Poll Tax) to Council Tax.

    Income Tax Rates may have fallen over the last 35 years but that doesn’t necessarily mean you are paying less tax.

  40. @Couper / Allan

    I’m forgetting what ‘C&S’ stands for, although I’m pretty sure it refers to a coalition on a policy by policy basis.

    Let’s hope it doesn’t become the 5th item on this list:

    http://en.wikipedia.org/wiki/C%26S

  41. @ Ken Smith

    ‘I understand there have to be cuts but the way this government is going about is unfair.’
    ————————————————————————–
    I agree with you that the cuts are unfair but not that there ‘have to be cuts’. As they say on the BBC, other economic strategies are available.

    Rather than cuts and the deficit, the focus could be on the lack of demand… And a solution to lack of demand might be to increase benefits because the poorest spend their available resources. Other alternatives would be to cut VAT which is a regressive tax, and increase the minimum wage substantially.

    IMO the best economic intervention that govt could make would be to fund a Job’s Guarantee for all who want one. Ultimately, this would pay for itself and society would benefit… just as occurred when FDR introduced the New Deal in 30s USA.

  42. The elephant in the room is tax collection-hmrc estimate the tax gap at 34 billion,that is the tax which should be paid but isnt.

    If that figure is underestimated as you might think ,given that hmrc are guessing,you can see that a large part of the deficit could be covered without cuts or tax increases.

    Unlike social security scrounging tax avoidance is mostly perpetrated by the rich is fuelled by greed and by corporate giants advised by the big 4 accountants.

    So the first step is to make it unpopular and have greater transparency.As carney and the imf woman have said democracy is threatened.If your average voter realised what was going on and the fact that they pay more as a result then current voter disillusionment would go off the scale.

    The penny is dropping ,the tories know they cant cut tax and labour cant fund its social objectives without dealing with it.Brown,blair and darling were servile in the face of city threats to decamp to switzerland.They also feared the effect on aspirational C1s.Cameron whose father made plenty from tax havens and osborne are less daunted.As is miliband.

    So post crash politicians are getting bolder,the AS is full of make the rich pay especially in London.And politicians now realise its popular.More to come methinks.

  43. BIGFATRON

    Try reading my post at 9.54, I was not being in the least partisan, I was talking about the UK’s economic decline and blaming it on the public’s desire for the apparent “soft options”. I made clear that I belong to no party and that no matter which government is in power I think the decline will continue.

    Basically I blame the majority of the British people and economic developments elsewhere in the World for our decline.

  44. @Allan Christie

    If the arithmetic was such that abstaining on a confidence vote would see a Conservative or Con/Lib government at WM then I think the SNP etc could swing that. Then as SNP don’t vote on English matters I am sure a deal could be done.

    My personal view is if rUK wants a right of center government then fair enough as long as Scotland gets real Devo-Max.

  45. @Statgeek

    Confidence & Supply, ie an agreement to vote with the government on motions of no confidence & budgets only

  46. STATGEEK

    LOL, It might not be the 5th one on the list but it could end up being the 5th one post formal coalition.

  47. SYZYGY

    ” just as occurred when FDR introduced the New Deal in 30s USA.”

    I agree the “New Deal” did have an effect, it brought US unemployment down from above 20% to about 15% which is still awful. What actually got unemployment down was WWII which brought American unemplyment down to well below 5%. It’s one of the myths of the “New Deal”, not that I am knocking Roosevelt,what he gave the American people was “Hope” as did Churchill in the War Years. This was well brought out in the recent TV series on the Roosevelt’s which i would recommend to anyone interested in American history.

  48. If I am elected PM in May then I will increased taxes on middle earners. it is not easy for them to move abroad, they are mainly PAYE so easy to collect and they won’t starve or freeze so no bad publicity.

    I’d increase the 40% rate to 45% and 50% on plus 150k. I’d restore child benefit to offset the effect on families with one earner. I’d spend half of what is raised on funding the living wage for all public sector workers and a modest wage rise for the rest of the public sector & the rest of what is raised on paying down the debt.
    Ed should listen to me plays to Labour’s constituency and is redistributive – definite vote winner

  49. COUPER

    “My personal view is if rUK wants a right of center government then fair enough as long as Scotland gets real Devo-Max.”
    ____

    Absolutely and if the Tories are the largest party I think that’s what would happen. I have a feeling Cameron has backed off from some of the Vow’s in hope that if he wins the next election and it’s a hung parliament then he could use the void in the Vow’s as a deal breaker with the SNP on a C&S basis in turn for devo max on EVOEL.

  50. #and EVOEL

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